Implementing turn rate standards help reduce inventory by 30%.
26% improvement in overall productivity
Strategic Intent
Redesign the business model to stabilize sales losses, improve customer service, cut costs and return to profitability
Situation
- Mid-size distributor of packaging materials
- Revenues down 24% due to economic downturn
- Costs not adjusted to align with sales reductions, resulting in two years of losses
- New “turnaround” CEO has sense of urgency
- Other new senior managers learning to work together
Issues and Barriers
- Purchasing and sales process produces excessive and aged inventories
- Warehouse operations lack planning process
- Distribution infrastructure utilizes too many locations
- On-time customer deliveries at 92%, despite excess delivery capacity
- Customer support not aligned with customer demands
Key Implementations
- Remove sales from sourcing, pricing, input on customer demand and inventory levels
- Set ABC standards for inventory turn rates
- Outsource distribution activities
- Consolidation for warehouses and distribution centers
- Supervisory training & management effectiveness coaching
Results
Seven-month Brooks International initiative completes with key results being realized. Client returns to profitability, achieving:
- 26% improvement in overall productivity
- 33% reduction in number of warehouses
- 30% reduction in total inventories
- On-time deliveries up from 92% to 98%
- Customer service levels up from 65% to 89%
Client Perspective
We have made a tremendous improvement in our operations, both from an execution and cost perspective. To a person, the Brooks team members were all very capable individuals and each made solid contributions to our operations.
— Chief Executive Officer
